Trump to approve $16 billion trade bailout for farmers


The federal government will send another round of aid, $16 billion, to help farmers reeling financially from President Donald Trump’s ongoing trade war with China.

The trade assistance package would send $14.5 billion in direct payments to farmers, leaders at the US Department of Agriculture said Thursday.

The president knows “that because of the agricultural trade surplus, our farmers, growers and ranchers will disproportionately bear the brunt of these trade disputes,” said US Secretary of Agriculture Sonny Perdue.

“I can’t remember a president who has been more concerned with the welfare of farmers and agriculture and long-term profitability than President Trump,” Perdue said.

It’s a major announcement for Iowa, which is estimated to lose $2 billion annually due to ongoing trade disputes with China, Mexico, Canada, Europe and other countries.

Iowa is the nation’s largest producer of pork, corn, and eggs, and the second largest producer of soybeans.

“Today’s announcement of additional trade aid to US farmers acknowledges the severe economic damage caused by the ongoing trade war,” said Lindsay Greiner, who grows soybeans near Keota.

“When farmers can’t make sales, they can’t make an income. However, the bills still have to be paid. This will help pay some bills,” said Greiner, chairman of the Iowa Soybean Association board.

Direct payments to farmers will be provided on a county-by-county basis, based on acres of production, USDA officials said.

“We look at the business damage felt by each county,” said USDA Deputy Secretary Bill Northey. “Then we divide that by the acres planted within the county, and then we have a one-time payment no matter which of those crops you plant.”

Those rates won’t be available until after planting intentions are made public in July or August, Perdue said.

“We want to make sure farmers are planting for the market,” said Northey, a former Iowa agriculture secretary, adding that the payments will not fully cover farmers’ business losses.

It’s a change from how the first $12 billion commercial mitigation package was implemented. It provided direct payments based on production. USDA paid different rates, depending on the crop.

For example, the agency provided $1.65 per bushel produced to soybean farmers, but only 1 cent per bushel to corn farmers. Prices for both commodities have fallen, in part due to ongoing trade tensions.

The USDA said dairy producers would receive assistance based on production history, and pork producers would receive assistance based on their hog inventory.

Payments are scheduled to be sent to farmers in three installments, with the first check sent in July. The last check could come early next year, depending on whether the US has a deal with China.

The new package also includes $1.4 billion in purchases of pork, dairy, fruits and vegetables to be sent to schools, food banks and other food aid programs.

Earlier this month, Trump said China was reneging on concessions it made in a new trade deal with the US. The president responded by raising tariffs to as high as 25% on $200 billion worth of Chinese goods.

He also said he plans to impose tariffs on an additional $325 billion of Chinese goods.

China has promised to respond in kind.

Sen. Joni Ernst, in a conference call with reporters Thursday, said additional assistance from the federal government is helpful, but it’s important to open new markets and expand existing markets where farmers can sell their produce.

“Farmers are grateful to receive additional assistance from the federal government, but we have to remind our farmers, they prefer to grow their produce and bring it to market,” Ernst said.

From last year’s $12B bailout: Dozens of Iowa farmers get less than $25 of Trump’s tariff assistance, data shows

Ernst and Sen. Chuck Grassley, R-Iowa, called Thursday for approval of the trade agreement between the United States, Canada and Mexico.

Earlier this month, Trump scrapped tariffs on aluminum and steel from Canada and Mexico, helping clear the political path for Congress to consider the new trade deal. It would replace the existing 25-year North American Free Trade Agreement between the countries.

Iowa Agriculture Secretary Mike Naig said he appreciates the federal government “offering a stopgap solution to help farmers affected by the trade disruption.”

“Yet farmers want trade, not aid. Farmers need markets to sell their produce,” Naig said in a statement. “This current situation is not sustainable. We need long-term trade agreements, and I think we can get there, but we need China to come to the table to negotiate.”

The money for the assistance will come from the Commodity Credit Corp., an agency formed in 1933 that has $30 billion in bond authority to support farm prices and incomes.

Officials said an additional $100 million will be provided to build new export markets or improve existing ones.

Farmer groups welcomed the help.

“While another round of financial assistance may help keep some farms running, our members have made one thing very clear: they prefer trade to aid,” said Craig Hill, president of the Iowa Farm Bureau Federation.

“As the cost of running our farms continues to rise, to remain sustainable, farmers need to access global markets for their produce, and securing trade deals will have a far greater and long-term impact on the farm than temporary relief.” Hill, a pork producer near Milo, said in a statement.

“Farmers across the country are struggling. Wet spring weather, trade disputes and tariffs, and demand destruction in the ethanol market are forcing farmers to make tough decisions,” said Lynn Chrisp, a Nebraska farmer and chairman of the board of the National Association of Corn producers.

Falling corn and soybean prices have Iowa farmers worried about whether they can withstand another year of potential losses.

Nearly 3 percent of Iowa farm borrowers won’t be able to get renewed financing, the Chicago Fed said in February, according to a survey of lenders.

US farm revenue this year is projected to be $69.4 billion, about 45% below the 2013 high.

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